CBI/Pertemps labour market update October 2018

The labour market remains tight, with unemployment still at its lowest since 1975.

The employment rate remains close to record high, with employment growth similar to the relatively strong rates seen over most of 2017.

The unemployment rate continues to be at 4.0%, the joint lowest rate since 1975. However, the inactivity rate has risen for a second quarter in a row.

Pay growth is the strongest it has been in a decade, which is a step in the right direction, but household budgets remain under pressure with inflation remaining well above the Bank of England’s 2% target.

Across the UK, regions and nations have seen a mixed picture in employment and in unemployment levels.

Figures published on productivity earlier this month showed a small improvement, but subdued productivity growth remains the UK economy’s Achilles’ heel. The Chancellor’s forthcoming Budget is an opportunity to encourage greater business investment in training, equipment and, crucially, digital and new technologies, which would help raise productivity and pay over the medium term.